The year 2010 proved to be a year of a two-speed economic recovery. Weighed down by debt and high unemployment, the economies of the developed world dawdled along in the slow lane. In contrast, the more nimble economies of the emerging
world accelerated at a far brisker pace.
For its part, the UAE's recuperation has proved robust, with its economy bolstered by higher oil prices and progress in resolving debt issues.
Perhaps one of the most positive developments within the UAE in 2010 was the speedy resolution of state-controlled Dubai World's Dh91.4 billion debt restructuring deal. The agreement of the complex process in only ten months helped
to restore investor confidence and remove a cloud of uncertainty about the emirate's debt issues. It was a measure of the importance of the October agreement, that it helped to coax both the emirate and other government-related
entities back to the capital market with bond sales.
Forecasts for the UAE's economy in 2010 steadily brightened after the success of the Dubai World restructuring and as the country benefitted from stronger signs of growth in other parts of the world. In October, the International Monetary
Fund (IMF) raised its outlook, forecasting economic expansion to reach 2.4 per cent, faster than the 1.3 per cent it previously predicted. The Washington-based fund credited reasons for its upgrade as Asia’s economic rebound and
Dubai World's debt agreement, which would resolve market uncertainties and contribute to boosting property-related sectors.
Sultan Al Mansouri, Minister of Economy, predicted in November that the economy would expand between 2 and 3.2 per cent in 2010. GDP would reach a record high of Dh 1 trillion by the end of the year, he said.
Other forecasts have also estimated growth to be around a similar level in 2010. The Economist Intelligence Unit (EIU) expected the economy to grow by around 2.6 per cent in 2010, with ratings agency Fitch forecasting growth of 2.4
per cent. Nonetheless, these forecasts are below Standard Chartered's estimate of 3 per cent growth but higher than the Arab Monetary Fund's outlook of 2 per cent.
Investment in overseas markets has long been vital to the UAE's strategic drive to create a security net for future generations who at some point are likely to face the prospect of a depletion of the country's hydrocarbon wealth. Among
the major international investment bodies in the Emirates are:
Abu Dhabi Investment Authority (ADIA)
ADIA's mission is to secure and maintain the current and future prosperity of the emirate through management of its investment assets. ADIA is a leading international investor and for the past 34 years has established itself as a responsible
and trustworthy investor and a strong supplier of capital. ADIA oversees a substantial global diversified portfolio of assets across varying sectors, regions and asset classes, including public listed equities, fixed income, private
equity and property. It does not seek active management of the companies it invests in, only long-term sustainable financial returns.
Abu Dhabi Investment Council (ADIC)
Responsible for investing part of Abu Dhabi's surplus financial resources, ADIC employs a globally diversified investment strategy focused on gaining positive capital returns across a range of asset classes.
A subsidiary of Abu Dhabi Investment Council, Invest AD, a government investment vehicle similar to ADIA, was established in1977 as Abu Dhabi Investment Company. In 2007, its mandate and its name changed when the Council decided to
allow outside investors to put their money in alongside it, making it perhaps the only sovereign fund in the world to welcome external funds. Invest AD's business now includes a proprietary investment arm that continues to invest
on behalf of the government and a third-party investment division for attracting capital from external investors.
Investing to create stability and foster diversification, the body owns 60 per cent of Borse Dubai, a holding company that in turn acts as a holding company for Dubai Financial Market and NASDAQ Dubai.
One of Dubai's major holding companies, Dubai Holding is divided between the Dubai Holding Commercial Operations Group (DHCOG) and the Dubai Holding Investment Group (DHIG), formed in 2009 when Dubai Group and Dubai International Capital
(DIC) were combined.
Property developers Dubai Properties Group, Sama Dubai and Tatweer fall under DHCOG. In addition, DHCOG holds the hotel operator Jumeirah Group and the business park operator TECOM Investments. DHCOG in December 2010 agreed with creditors
to convert Dh2.03 billion of debt into a new five-year loan (see Financial Services for more information).
DHIG was formed as a result of combining the previously separate entities of Dubai Group and Dubai International Capital (DIC). DHIG also now controls six financial companies that are under the responsibility of Dubai Group including
Dubai Capital Group, Dubai Financial Group, Dubai Investment Group, Dubai Banking Group, Dubai Insurance Group and Noor Investment Group.
Focused on the private equity asset class, DIC operates through global buy-outs specialising in secondary LBOs in Europe, North America and Asia. It also focuses on MENA investments including LBOs, funds and co-investments, infrastructure,
growth and development capital. DIC signed an agreement in December 2010 with its creditors to move ahead with a Dh9.5 billion debt restructuring. In addition, Dubai Group, is also believed to be working on a restructuring (see
Financial Services for more information).
The year 2010 proved a watershed year for Dubai World. The former engine of Dubai's rapid growth finalised a Dh91.4 billion debt restructuring agreement in October with its creditors. Nearly a year earlier the diversified conglomerate
had requested a rescheduling of its debts. Nakheel, the property developer behind The Palm Islands and The World, was also part of the restructuring. Nakheel, was pledged Dh29.4 billion in financial support by Dubai’s government
in March 2010. Limitless, another development unit of Dubai World, is also engaged in a plan to reschedule debt repayments.
Dubai World's restructuring agreement did not include other parts of the company's portfolio namely Infinity World, Istithmar World, and Dubai Ports World and Free Zones World.